in a row, more protests are planned for today, this as chinese troops gather near the border. law enforcement targeted, the fbi investigating shots fired at immigration and customs enforcement office in san antonio as a targeted attack, plus the nfl teaming up with jay z, will super star will help with entertainment offerings and social justice issues. mornings with maria start right now. ♪ ♪ >> ing day show. dagen: big show this morning,

washington examist anderson and benchmark managing partner, look at him, kevin kelly, looking good because you have the light. >> i love it. dagen: what's it called by diva light. >> i go by divos. >> no divas or divos just common sense. fox news contributor adviser and founder former economic adviser robert wolf, shape of the race for the democratic nomination for the presidency, we will talk to him at length, fox news senior judicial analyst judge andrew napolitano, service's committee member sean and the now ceo herman cain and dr. mikhail varshavski, dr. mike, you don't want to miss

any of the gentlemen, to the future this morning, 159 point loss after stocks soared yesterday after president trump delayed tariff on certain chinese goods until december 15th delays include goods like smart phones, laptops, video games, the president commenting on the move >> some of the tariffs will have impact. [inaudible] >> the only impact that we've corrected almost -- [inaudible] dagen: china feeling the impacts of the trade dispute posting weak economic numbers with its jobless rate reaching the highest on record, you also have other indicators, factory production, property investment much lower than expected. try to answer my question earlier, so there's a trade

delay on the tariffs on some goods, there's another meeting scheduled for is it next month in washington on the trade negotiations but is the world economy slowing so much that our move with china don't matter at this point? >> they're very much is that danger right now and the reason the market is off today because of bad economic news from china, the troubling news from germany, we've had negative interest rates in effect for quite a while in europe and yet the german economy is contracting, that's scary. dagen: what do you make of this move, yesterday, i was talking to rachel, our producer this morning, oh, okay, delay in tariffs is now the -- is the new interest rate cut by the federal reserve, what do you make to have market now and maybe in the next 6 months to a year. kevin: we are heading to volatile stock, september and october tend to be choppy, the market is trying to get footing,

outsize moves even in august as precursor, it's important to know that germany has been slowing for 4 months, that's a troubling trend and especially with china coming out with the slowest growth in industrial production in 17 years, we have the world's largest economies are slowing, even look at our gdp compared to last year, so i think the market right now has shown you where you need to be and that's in treasures, asset classes over the past 6 weeks, 8 weeks during the troubling time. dagen: can we take a look at 30-year yield, i think, and i want to ask you this, kevin, you would still buy the 30-year yield, i think that might be record of 30-year yield. would you still buy treasuries? >> definitely, i think we will have the 30-year yield go under 2% fairly soon and set new low for 10-year treasury, that's

heading to range to 1 and a quarter percent given the recent troubling news. you know what's interesting about the 30-year yield, that's a 30-year bond, the fed funds rate is overnight rate, fed fund is 3.2%, that's telling me you have a lot of rate cuts in the pipeline. dagen: so essentially the federal government, they have to pay more -- you have to pay more to borrow on the very short, you have to pay to borrow for 30 years. >> and treasury bond market is making it loud and clear to federal reserve policymakers that it's high time to begin cutting rates with aggressiveness. kevin: i had meeting with institutional investor yesterday and that's always been -- looks at the market, no-brainer trade, getting into the shorter-end of the curve actually, he's not

being compensated for that and that's the biggest problem, right, if we look at our 30-year, you look at germany's 30-year, the clear choice to be in the u.s. treasury market. >> i will add something, as federal reserve cuts interest rates it becomes more attractive for foreign investors to put their money in u.s. treasuries because as the fed cuts rate, cost of removing, exchange rate risk into particular move to dollar treasuries is lower. dagen: i saw this yesterday, broke while the protests were breaking out in hong kong, americans views of china are changing, new survey found that 60% have unfavorable opinion on china compare that to 47% last

year. dramatic increase there and it's just -- it's a number of different things and the unfavorable view has gone up, what do you make of this and politically as well? >> well, i think it's driven by a mix of economic security and cultural forces, hey, we've been getting a bad deal for them and began to resinate for folks that may not think about trade issues that often. security issues and people begin to go think more about asia and the security in the region being in news more often, understanding increasingly among voters that china has to play a role and want to resolve the situation and finally things that we are seeing in hong kong, what we are seeing with the leaders in china, story about the chinese government not treating their people very well because does not sit with people as well. dagen: can i ask you a question

about china and americans overwhelmingly agree in pew research poll that china's military expansion is a negative development for the u.s., but where do voters sit and the american people sit, would they side with president trump even in the economy weakness and i only point that the two-year on the yield inverted and that historically, i think every recession since world war ii at least proceeded by inversion, again, that means 2-year rates are higher, the yield is higher than ten-year, it's been that way for 2 months, spring for the most part, before we move onto discussion of inversion, where do americans sit in terms of the tug of war between doing the right thing with china but also an economy that looks -- certainly slowing here in the u.s. >> well, i think limits to the amount of short-term paying --

pain people are willing to take on and long-term gain the president promises might be there. typically if you ask the job that the president is doing, he does about 10 points better on the question of how do you think is handling of the economy versus handling to have job overall, so it's starting to wonder what were the hypothetical situation look like where let's say the economy was doing worse, not doing as well where people do not give the president as much credit for the economy, overall job approval would be in the low 30's, similarly if you scale back on some of the things like the tweets, the things that swing voters don't love as much with an economy like this at the moment could job approval be higher, it's interesting hypothetical. dagen: what do you make to have inversion? >> yeah, i think it's actually signaling worldwide problems and growth overseas, i mean, if you look at the u.s. economy, consumer confidence is still elevated because look at the job's market. dagen: focus on the positive. >> right, 70% of service's economy and people feel good, i

think, one of the reasons the tariffs were delayed because latest round of tariffs actually hit the consumer side of the ledger. the first round of tariffs were more on enterprise, this would have hit the christmas shopping season, the holiday shopping season, goods would have been impacted. that would have hit consumer confidence because all prices gone up. that's why you saw the delay. dagen: president trump said essentially the washington editorial page call it trade wars aren't free to consumers despite the messaging that's coming out. >> he loves them. dagen: right, i always point to that, trade wars are easy to win which is proving -- >> what i said earlier, we are not helpless in the treasury yield curve inversion, short-term interest rates are too high, and the federal reserve can simply go ahead cut rates and get rid of that yield

curve inversion quickly. how did did that in 1998 it worked. there was no recession. they took their tie, they tolerated, the longer they tolerate the inverted treasury yield curve, the risk of recession, we have an economic downturn. >> i will point out that was during long-term management collapse, also during the impeachment proceedings against bill clinton between -- between july and september, the s&p fell over 19% and recovered and then some by the end of the year. >> rate cuts were in the context of real gdp growth in excess of 4%. dagen: do you think the fed cuts 50 basis points in september? >> i think they might very well cut 50 basis points if we get troubling news, disappointed on

jobs for september or august, that gives them strong reason to cut half percentage point. dagen: does it rescue the economy? >> reduces recession risk, would it continue with economic recovery, that's problematic. >> you can't escape recessions, it's only a matter of time. dagen: do you think we go to recession? >> within the 18 months. dagen: just in time with people going to the polls, kristin, we will discuss, more on the chaos in hong kong, china denying u.s. navy visit to port as president trump urges calm. giant in online streaming, details next. with sofi, get your credit cards right- by consolidating your credit card debt into one monthly payment. and get your interest rate right. so you can save big.

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dagen: shake-up with jeffrey epstein died, cheryl casone. cheryl: warden has been on leave, checking on epstein every 30 minutes and maybe they were not. guards fell asleep on the job as well. fbi agents conducting sweep of the jail, that's today. investigating office shooting, several shots fired at the building in san antonio, as you can see agents believe the gunman knew exactly where to aim, there had been at least four antiice attacks across the country in justless than a month you viacomm and cbs shows, an attempt to take on netflix and

huracanes -- hulu, joining forces with mission impossible, that should help the company take on the marvel, dagen, the question here there's so much competition with netflix, and that's the question this morning . dagen: that's okay, you call me disney dagen. [laughter] dagen: nothing princesse about me.

thank you for making me laugh. nfl has turn today jay z to help smooth out social justice tensions with players, what else is on the horizon? plus twitter, flat, challenges congresswoman alexandria ocasio-cortez to debate over unions, stay with us. (vo) the hamsters, run hopelessly in their cage.

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so you only pay for what you need. it's a different kind of wireless network designed to save you money. save up to $400 a year on your wireless bill. plus get $250 back when you pre-order a new samsung note. click, call or visit a store today. dagen: breaking news right now, the yield on the 2-year treasury and 10-year treasury yield, that part of the yield curve inverted for the first time since 2007,

so what does that mean, it means that the two-year yield is higher than the 10-year yield, that turns the world of banking upside down and also historically since world war ii, it's been a pretty good indicater of recession, this happening this part of the yield curve inverting for the first time since 2007, that was right before the financial collapse. that's taking the broader market down with it, joining us global investment chief market strategist, victoria fernández, victoria, what do you make of this? >> we knew it was probably coming, but i'm not sure it's a recession signal at this point in time, i know historically it has been but we are, what, a basis point inverted at this point in time, let's see if we get more relief coming, cpi numbers higher than expected, if you look at the trending cpi, 2.8% annualized on the number, maybe that push it is longer-end up a little bit going forward, i

wouldn't make a recession call but definitely something the press will be watching. >> we talk about the federal reserve needs to act, needs to take funds rate 2, 2 ant -- and a quarter, 1.6%, with the consumer crisis going up yesterday for the second straight month, that's the strongest 2-month gain in more than a decade, so is the fed in a bind or not? >> i don't think people are worried about price inflation at this point in time, inflation expectations very well contained, if you look at treasury bond market, expected rate of inflation over the next year is running at about 1.5, 1.6%, this recent gain, i think it's going to be a brief jump by the cpi is not going to prevent the fed from responding to increase risk of recession, that's on the front burner

inflation way off in burner in some place. >> you know what's interesting in inflation side, healthcare inflation actually went up and that's a broad concern because we actually have an aging pop ulation we see housing go up in rate of inflation, i keep my eyes wide open with what's going on, not only the inverted yield curve but also copper has been exceptionally, coil has been exceptionally weak, would all the things in aggregate, i say, okay, i need to get more defensive, data centers, cell phone towers, distribution centers, that's how i've positioned portfolio, victoria, i don't know where you think investors should be, given the concerns, that's where i want to be.

dagen: we will get macy's earnings, wal-mart sales tomorrow, with that is the backdrop to kevin's question, how are you allocating? >> sure, consumer has been the key the whole year and we have been talking about that and obviously department stores are in trouble, talking to clients, they are saying let's find opportunities in the market, whether it's a global dividend, whether using options to take advantage of volatility in the market, we are longer-term investors, don't trade on the headlines, longer-term outlook, put some more value, core positions in equity portfolio, i wouldn't go full on defensive because as we know it only takes one tweet, it takes one event to have market shift. dagen: this is something i've said before and i only acknowledge that i do repeat myself but the data -- the markets were already weak before, the inversion of the 2

and the 10-year treasury, china's jobless rate hit highest level ever reported, consumption, property investment much lower than expected. germany's economy contracting, we are fighting the trade war, however b careful of us winning it because you have the entire world that's slowing down if not contracting and it will take the united states with it, yes or no? >> no, absolutely, that's why we are seeing rates move as low as they are, it's importing that from the rest of the world, uk in contraction, germany, but as a whole we are importing that slowdown, that's what the fed is saying biggest reason for lower rates, i'm not sure at this point that lowering it another 50 basis points will help that business investment and cap x, rates were low and they haven't been investing at this point, i'm not sure 25 basis points

shift cap x. dagen: really quickly, kristin, jon hilsenrath had been talking about going through conference calls and comments from ceo's being asked about how row repairing for a recession, what are they saying of potential recession, yesterday gm and ford at a conference were talking about planning for a possible economic downturn, maybe ceo's are getting asked about it, but the more that people, regular folks hear the word recession, does that change their attitude about the economy? >> at the moment, voter groups, they feel personally, economically okay, they are not word about losing jobs tomorrow, something that they were worried about 10 years, it feels uncertain, fragile, a sense out there priced into a lot of the polling numbers that people -- i don't know that they're going to

stay good with one tweet, with one event around the world, all of that could change. dagen: market selloff, jon, you we wanted to say something. >> let's not forget when we get lower interest rates, shorter-term interest rates almost guaranty longer-term interest rates and with that more refinancing activity, the month of august has been a typically strong in terms of corporate bond issuance, a lot of that to refinance outstanding debt, by the way, recently, applications for mortgage refinancings are running higher, 85% year over year, that's putting extra cash in savings accounts of household. dagen: i have pushback from stephanie from housing issue but you will have to wait for that, she was tweeting about it last night. victoria fernández, thank you for being here. >> my pleasure. dagen: hong kong may have more protests ahead, how the u.s. is

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dagen: welcome back i'm dagen mcdowell in for maria bartiromo, it's wednesday august 14th, your top stories at 6:30 a.m. eastern time. breaking news, a recession signal slashing, the yield on the 10-year treasury falling below the yield on the 2-year treasury, why is this a recession signal? because basically banks for the most part, it's impossible for them to make money, lending money, again, you borrow on the short end and lend on the longer

end, this disrupts banking system and signals the fact that people are diving into 10-year treasuries, symbol of economic weakness on the horizon, futures lower this morning and this moves into treasuries and the inversion in the yield curve pushing stocks down even further, 225-point loss on dow futures after broad rally sparked by president trump delaying china tariffs but, again, delay just does not get rid of uncertainty, we should point that out, apple adding 50 points to the dow because smartphone tariffs delays, new 10% delays until mid-december. checking on the global market action in europe you have losses across the board, selling picking up steam, germany's economy contracting in most recent quarter and dax in germany falling 1 and a third percent. the economists and the government blaming tensions between the u.s. and china as well as possibility of no brexit deal, speaking of china and asia

overnight, markets were broadly higher following on the rally here in the united states, some weakness in china's economy that we have been talking about as well and on to the turmoil in hong kong, on hold for now, protesters are still at the airport after flights were disrupted for 2 days in a row, we have the latest there. and more trouble for boeing, plane delivery falling and another airline to cut more flights as 737 max jet remains grounded. music super star looking to tackle social issues after anthem protest and congresswoman alexandria ocasio-cortez challenged on debate over unions, more on the spat with dave. warning for streaming fans, binge-watching may be bad for your health, we will tell you

why, when your binge-watching two seasons of the crown, just asking for a friend. hong kong unrest, china denying request for two u.s. navy ships to visit hong kong, protesters stretch through intense weekend and shut down hong kong on monday and tuesday, president trump tweeting on this yesterday. , our intelligence has informed us that the chinese government is moving troops to the border with hong kong, everyone should be calm and safe. joining me now retired u.s. army, author of the book double cross fire. general, good to see you as always, what do you make of the situation in hong kong again and very precarious? >> dagen, we have to remember that hong kong was under british rule over 150 years and in 1997 it was transitioned to the one country two systems rule under china and it's a limited

democracy and so with that background really what we are looking at is a free market democracy that is coming into clash with the communist in china and chief executive represented their governor, so to speak, introduced a bill that would extradite criminals to china and the people on the ground, the citizens of hong kong are concerned that this is a slippery slope and rightfully so that split call prisoners can be extradite today china and it would be the first domino, authoritarian rule coming to hong kong, that's what the led the people of hong kong, used to liberty, used to freedom, use today free markets that are concerned and you see the passion with which you're protesting and holding american flags and uk flags in the streets and so we are a symbol

of democracy and china sitting on the hill that president reagan talked about and china permitting u.s. warships to coming into port, the u.s. navy which has never been an issue before and i understand china's concern about united states and ports, further appear -- hong kong appeared ally with the united states, so it's a tense situation right now and chairman, the chief executive lam, she can stop this be withdrawing the legislation and becoming a leader of her people as opposed to a proxy for china. dagen: but china that would be symbol of weakness potentially to mainland china, to beijing, china, beijing clearly wants control of the banking system in hong kong and the wall street journal called yesterday's

protest a propaganda victory or beijing as it tries to turn the public against what would be overwhelming peaceful protests, to that point, do you think president trump needs to speak out against this chinese crack-down forcefully? >> i think the president is walking the fine line that he has to walk in the middle of trade negotiations that impact the entire country and even the world and the protests right now that could be easily resolved and so what i would expect the president to do is support people in hong kong and also not burn the bridge with china, it's a very delicate negotiation happening here and he should not be throw out the baby with bath water, should not be burned out to try to, you know, have a #campaign on twitter with hong

kong, people will forget about this in a week if it's resolved peacefully? dagen: general, good to see you, thank you very much for being here this morning. more fallout from the grounding of boeing 737 max jet, cheryl casone be details there, cheryl? cheryl: air space company has basically down, global air bus on track to pass boeing as the world's largest plane maker and grounding of 737 max at norwegian air, that start on september 15th. nfl is teaming up with jaiz z, rapper helping the league's smooth tensions with players over social justice issues, also help nfl entertainment and includes half-time show, rock

nation to play a major role in that, jay z, and then bar stool challenging congresswoman alexandria ocasio-cortez. basically caused a series of tweet that is cause ad lot of interesting antiunion message on twitter, unionize, snapped back that he would fire anyone on the spot who contacts, the congresswoman chimed in said they could face legal action, trying to unionize, you are likely breaking the law and can be sued in your words on the spot, he likes to debate alexandria ocasio-cortez, not accepted. >> thank you, cheryl.

[laughter] >> what do you make of this? the discourse on twitter? >> yeah, she refuses to partake in any debates because i think she's smart, she doesn't want to be -- she doesn't want to fly too close and get burned, i don't think we should hold our breath to see the congresswoman engage in any thoughtful debate any time soon, she feels comfortable on twitter with her thumbs typing away and dave is trying to get her to engage in that debate and i don't think it'll happen. >> there's a strong incentive to be engaged to punch up -- people engage, it's rooted in the economics of online publishing these days, so just earlier this week the ringer that i love reading -- dagen: rewatchables.

>> very much. >> go ahead. all the other sports and online publishing platforms, are they now facing pressure for their writers to unionize. >> unions do not work, highly competitive evolving industries, it's a big mistake and could end up costing jobs. dagen: i was in a union, a union related to a reporting job that i had and my issue always was last hire, first fired, so there was no incentive, you work hard and you try to move up and if there are layoffs doesn't matter how hard you've worked, your performance -- that was my personal issue. i lasted maybe a year on that job because i hated it. coming up raising the smoking age, one city wants to do just that to curve teen vaping, that story ahead, plus streaming setback, why binge-watching tv shows could be hazardous to your health, dr. mike here coming up.

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dagen: headlines across america, the san francisco chronical reporting san francisco's school board reverses course and decides to save controversial

mural, vote to go obscure the mural depicting george washington's life rather than destroy it. critics say it's outdated, preservationists argue removing it is censorship, the controversies surrounding slavery, white settlers and native americans are shown. the denver post writing health advocates push growing ep deadic of teen vaping, the proposal would raise age to 21 and adding enforcement system and fight over taco tuesday heats up. taco john has been protecting taco tuesday slogan since trademark 30 years ago, now going after brewery sending a cease and desist order to

promote food truck,, it's comicl when you're fighting over that, you really have no problems, meltdown caught on camera, youtube apologizing for deleting video of chris cuomo confronting a heckler. warning tv fans to layoff excessive streaming, stay with us. there's a company that's talked to even more real people

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dagen: your health and screen

time, neurologists say watching tv affecting tv, could be hurting your brain as well. joining us now dr. mikhail varshavski aka dr. mike, please explain, bearer of bad news. >> i hate to talk about because i occasionally do binge-watch, we all have our shows, it's not healthy for mind and the body, number one socially isolating activity, you are doing it without interacting with other people which is going to hurt you, number 2, at the expense of your sleep, staying up late at night watching the shows, obviously that hurts your mind and finally, when you're not moving increasing your blood pressure, you're adding those pounds, you're actually hurting the mind, so the solution to this is limit binge-watching, if you're going to be doing this, try limit the amount of episodes, netflix does a good job, are you still watching

after a few episodes, that's medical advice right there, get off up the couch, move on some. >> the lawyers have something to do with that, netflix? the lawyers said we should probably put the disclaimer in there. dagen: is binge-watching that big of a problem? >> huge problem, shows have become so addicting. they are trying to figure out how to keep you watching with the shows, made in such a way where there's little tie-off at the end that makes you want to watch the next episode, if you're not watching, you're not getting the hit. >> based on what type of show it is, am i doing more damage to myself binge-watching a show little lies, than british baking show. [laughter] dagen: so relaxing. the british bakeoff is most

relaxing soothing television program in the history of television. >> i have to check that out apparently. dagen: the worst thing that happens that somebody -- >> no risk, maybe even hear people -- i think you guys are spinning it. [laughter] >> look, if we will be sitting for 4, 5 hours at a time, that's unhealthy, the new slogan sitting, smoking, that's some truth to it. >> i don't want to be right. [laughter] >> people stair at their device for hour after hour, that's got to be bad too? >> equally as bad too especially the devices are hacking your mind even in a worse way, notifications, the likes, they condition you to want more of that and when you experience social interaction in real life outside of the phone you almost lose the sense of how to be normal in the social settings.

dagen: i actually thought about this over the weekend just because of the outrage and the uproar that is you see over and over again on social media and the need for attention and people doing outrageous things saying outrageous things for that attention, was it just switched on by social media, do we all have that built into us or did social media create that narcism? >> i think the best answer to that socialism is a drug, when people use cocaine, they want more of it. social media gives you the same dopamine hit that cocaine gives you and we want more of it and the problem is when we use too much screen time we forget that the outside world exists and lose the social interaction that's keeping us healthy. >> the validation part, the dopamine part? >> the validations, notifications -- dagen: attention. you become addicted to the attention. negative -- >> what's sad is we are learning

our brains are actually hackable by other people and the companies doing best, google, youtube, facebook, all these companies are doing a good job at it. dagen: you will do a story of fitness trackers, do they improve your health? we have about a minute. >> what's interesting in health trackers doctors got excited about them, patients will be in charge with fitness trackers but the outcomes aren't there, they used the fitness tracker, may take a few more steps but in reality blood pressure doesn't change, cholesterol, maybe a few more steps here and there, we are trying to figure out how to use fitness trackers with certain apps, monitoring family physician in order to get health outcomes, so far disappointing. dagen: if you want to lower blood pressure, watch the great british bakeoff, binge-watching, i don't care what people say. thank you so much, mikhail varshavski, please come back very soon, breaking news this morning, a recession signal

flashing, the yield on the 10-year treasury falling below the 2-year treasury yield for the first time since 2007, stocks melting down, this meltdown caught on camera, youtube apologizing for deleting the video of chris cuomo, more when we come back. decision time... you need decision tech. only from fidelity. sleep number 360 smart bed.st sale of the year on the can it help keep us asleep? yes, it senses your movements and automatically adjusts to keep you both comfortable. save 50% on the sleep number 360 limited edition smart bed. plus 0% interest for 24 months on all beds. only for a limited time. ♪ ♪ ♪ ♪

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dagen: good morning. i'm dagen mcdowell, in for maria bartiromo. it's wednesday, august 14th. your top stories at 7:00 a.m. eastern. a recession signal flashing, the yield on the 10 year treasury falling below the yield on the two year treasury, that's called an inversion. right now, we don't really have that but this happened early in the morning and it has -- every recession since world war ii, it has been preceded by this inversion, this yield curve inversion. the 30 year yield falling to a record low as investors run for safety and that is pulling down

stock few churls, running out -- futures, running out of equities at the moment, 238 point loss on the dow future, this move in the treasury market driving futures even lower. this a after yesterday's broad-based rally sparked by donalbypresident trump delayings on some chinese imported goods. it's a perfect storm this morning. you have the inversion of the two and 10 year yield curve, you have concerns about the global economy, in europe we have new numbers out o yes, out of germag the economy there inverting the most recent quarter. you throw in signs of a slowdown in china, the jobless rate hitting the highest level on record, property investment coming in lower than expected. markets, however, they are higher overnight after the tariff delay. again, it is a global economic

slowdown, you have this worry, this recession signal flashing in the treasury market here and it's making for a perfect storm for stocks. turmoil in hong kong as well, creating uncertainty, it's on hold for now. protesters are still at the a airport after flights were disrupted for two days in a row. we have the latest there. and then housing in america, mortgage debt hitting an all-time high, eclipsing the level even hit in 2008 as the financial crisis started. a look at why the numbers have gotten so high and is it worrisome or not? the dangers of texting and driving, the heart-stopping video one police department released to combat the growing problem. watch this. that was a crash caused by texting. here to break it down with he me, moody's capital markets chief economist, john lonski, republican pollster, christian

anderson and kevin kelly. welcome one and all. great morning. yield curve inversion, the two year yield higher than the 10 year for the first time since 2007. what does that say? >> it's says the global economy is contracting. we've seen that in the pmi, the industrial production, they're in the low 50s. the trend is showing them shrinking. why that matters is that u.s. investors know that 40% of all revenues for the s&p 500 companies come from overseas. so if that weakness is going to go into corporate america, you want to be in the treasuries over the stock market, especially heading into a volatile time of the year of the market which is september and october. so they're going to want to see what the fed actually does in september. dagen: what does the fed do? what does it need to do and will it stabilize the u.s. economy because that's really the question. >> i think the fed should provide a positive shock to the u.s. economy and should bring the federal funds rate down to a

level that is maybe commensurate with the 10 year treasury yield right now, that's 1.62%. that's a 50 basis point cut, perhaps they should have cut that much at the latest meeting. they didn't. i think that would, again, push investors into riskier assets, it would also promote refinancing as well as debt finance spending. dagen: will it do anything for the economy? >> i think it definitely will. oh, definitely. i think it's going to provide more liquid at this, -- liquidity, financial liquidity for the economy. as you hav liquidity, you reduce risk of seizing credit markets. >> the u.s. fed can't save the world. the problem this time around is that the world could actually impact the u.s. economy and we've seen it in our gdp, right. so the problem we're going to have is that we can't evade a recession forever.

it's going to come. it's just how deep and how much harm can it have in our economies is the real question and when will it come. so i'm seeing these signals over the next 18 months as they start to trickle into the real economy. you're seeing copper showing it, you're seeing oil showing it, the treasury market showing it, the industrial production showing it. investors do need to be wear. >ware.>> the world economy is sl growing, believe it or not. >> germany is slowing. china, industrial production is the slowest in 17 years. they constantly lie about their production. if they're saying they're at 4.8 when it was supposed to be at 6, then how bad is it over there. >> commodity prices are lower. copper, whatnot, other base metals are lower, so is oil. still, the commodity prices are well above the lows they set in 2015, 2016. and by the way, helping us get out of that slump in global activity, 2015 and 2016, was a drop by the 10 year treasury

yield down to about 1.5%, 1.4%. >> 2015 is when we had our last earnings recession. earnings recession. be on the lookout for that. >> you have to be careful of the risk. don't add on risk at this point. dagen: before we move on to john busy from the wall street journal, what about the consumer and the confidence there? if people's confidence turns negative, that could be self-fulfilling. right now, people feel good. >> people feel pretty good. if you ask people about how things are going in the country generally, they'll be more concerned if had they begin factoring in the global security situation, et cetera. they feel like things are a bit unstable. the tariffs have been postponed so folks can get through the holiday season without feeling things are too unstable. >> it's imperative that china and the united states resolve this trade issue as soon as possible. it's inexcusable to keep this

waiting out here. they have to come up with a compromise and get that out of the way given the fact we have a global slowdown that could lead us into an outright recession. dagen: that takes us to our -- the crisis in hong kong. police storming hong kong's international airport yesterday, clashing with protesters that forced the airport to shut down. the riots grounding flights and leaving travelers stranded. flights are resuming today as protesters apologize for the violent disruptions. joining me over the phone is wall street journal associate editor, former editor in chief of the hong kong based journal regional edition, john bussey. thank you for calling in. we need your perspective and the history. what do you make of what's happened in the last couple of days and what changes the situation on the ground in hong kong? >> for xi-jinping, i mean, the violence in a way is an an excue for him to rattle the saber a

little more loudly and talk about, well, perhaps china needs to intervene here. but more broadly and sort of the bigger picture is that the violence though in inexecutionae at the airport -- inexcusable at the airport, it's kind of a fringe group, and not a small one, of a much larger dissatisfaction within hong kong about china's encroachment on the colony. this notion of one country, two systems, was very much embraced by hong kong and by the world, quite frankly, that the freedoms of hong kong and critically for american business, the rule of law in hong kong would be permitted to prevail for years after china got hong kong back from the british and that seems to be eroding and has been for the last several years and that's why you saw hundreds and hundreds of thousands of very

peaceful hong kongers in the streets over the last few weeks, protesting, very concerned that chinas was bringing its lack of rule of law to hong kong. dagen: john, do you think, because, again, the latest issue that you were talking about in terms of the encroachment on the rights of people in hong kong and we've been talking about it, the bill that would a allow beijing to extradite anyone in hong kong to the mainland, carrie lamb had declared the legislation dead but refused to withdraw it. do you think it ultimately gets withdrawn? that would be a win for the people of hong kong. >> yeah, so she -- carrie lamb is playing to her minders in beijing and the people of hong kong feel that. and they feel her sort of incremental steps here declaring it dead, not with drawing it, as just an indication that she's waiting for accretion to play

here, that slowly but surely china's hand will move into hong kong. and again, that's why you saw massive protests. this was not a small gathering or a small disruption at the airport that we saw several weeks ago. this was hong kong turning out in a reputiation of china. for that, the u.s. business economy and the u.s. needs to very much awareness of the problem. the u.s. has a very large business footprint in hong kong. it is because the rule of law prevails there. you can do contracts, you can do arbitrations, a lot of regional headquarters are based in hong kong. so this is a big issue not just for the freedom of people, but for the freedom of movement of commerce and that's what's at stake here for the world. the other thing that's at stake is taiwan. taiwan is looking at this and thinking to itself, well, you

know, all of the love and sort of embracement of china over the years about talking about finding some way of bringing taiwan back into greater china, they're looking at the experience in hong kong and they're saying you've got to be kidding. there were promises made and there is encroachment now. the way that china -- that hong kong is going, taiwan will follow unless we watch ourselves. dagen: does the president need to speak out more forcefully in favor of the people who have been peacefully protesting, the freedoms they're fighting for essentially? >> well, i think that the president might want to take a lesson from precedent. george herbert walker bush spoke out very strongly, george bush spoke out strongly, ronald reagan, obama, clinton, they've

always had to step forward and to express the u.s.'s concern for the freedoms of people around the world and particularly in hong kong. he might want to take a historical reference point on that. dagen: john, good to see you or speak with with you, rather. >> my pleasure. dagen: we appreciate the time this morning, john bussey from the wall street journal. let's bring in the heritage foundation senior analyst, olivia. what next in hong kong. the wall street journal edito editorial page, the opinion side, said that yesterday was a propaganda victory for beijing as it tries to turn the public against what's been overwhelmingly peaceful protests. >> and that's the important element that we have to emphasize, that the protests have been overwhelmingly peaceful. now, unfortunately last night there was an a abbrgation from e

norm as the protesters were encouraged not to enter the terminal and i think the u.s. should be clear and vocal in its support for those who are acting in a peaceful manner. but more importantly, the u.s. should be very clear in its condemnation of any hints that china might be considering some sort of intervention and i think that there need to be real threats put on the table, including any individual in china to makes the call, there should be an intervention, should be considered for global sanctions, a treasury authority that enables them to target individuals on human rights and corruption grounds. this is a serious concern and hopefully china does not intervene and hopefully if it does, it's not in a violent way. >> this is kristin anderson of the washington examiner. my question's about sort of the pr side of this. yesterday you could see some images of some folks at the airport holding up signs saying things like sorry for the

inconvenience, we're fighting for our country. how do you think the images that come from yesterday will affect the way sort of the world looks in on what's going on in hong kong right now? >> i think that hong kong protesters have to carefully manage their image. they want this to be one that is clear that hong kongers are certainly seeking reform. they're looking for a change in their political system that helps them to better communicate to hong kong authorities and i think something to watch in the near term is whether or not hong kong authorities are in fact responsive to the demands of those protesters and i think right now what we're seeing is that the ability to communicate between protesters and government seems to be just completely malfunctioning and so we would be looking for some improvements in that regard. dagen: olivia, thank you for being here this. morning. i'm sure we'll have much more to discuss in the weeks to come. let's hope for a peaceful

resolution. coming up, drivers be warned, a chilling police video proving why you should keep your eyes on the road and not on your phone. yes, we will show you that. plus, 2020 heating up, bernie sanders taking the lead over former vice president jo joe bin in a key state, next. have debt we might d ie with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.

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helps people find coverage options based on their budget. flo has it, i want it, it's a whole thing, and she's right there. -yeah, she's my ride. this date's lame. he has pics of you on his phone. -they're very tasteful. dagen: the pent gone's inspector general investigating a $12 billion clouds contract. cheryl casone has more on this story. cheryl: this is a high stakes cloud contract that amazon and microsoft are trying to win. president trump is instructed the defense secretary to investigate complaints from other companies that amazon has the upper hand. well, amazon already handles tons of classified data from its work with the cia. several lawmakers have a question whether the process is anti-competitive. the federal aviation administration is banning some mac book pro laptops from

flights after a warning was issued that batteries could overheat and start a fire. they were sold between 2015 and 2017. apple issued a recall back in june. they're offering to replace the laptop batteries for free. apple lower than 1 1% in the premarket. if you think that text tining ad driving is okay, you need to watch this video. you see a driver crash into a utility pole while texting behind the wheel. this is courtesy of the berlin, massachusetts police department. the driver was not seriously hurt but was issued a citation. police are stressing that texting and social media can wait. it shows you, it is not worth your life or somebody else's life to text. dagen: that's what makes me furious. i see it. i've been doing 20 hour round-trip drives to virginia to see my family and you watch that

video and you think about, that is a very busy two-lane road. what if that car swerved in the other direction and hit a car with a mother and her children in it head-on potentially killing them. that's what they're doing. you're not just putting your own idiot life at risk. you're putting other people's lives in danger. you should get thrown in jail for that. cheryl: i applaud the police department for posting this. dagen: coming up, immigration lawsuit, two california counties taking on the trump administration over the new green card rules, stricter rules to determine whether you will be dependent on government assistance in terms of getting a green card. the legal case on legal immigration. plus, recession warning signs, mortgage debt piling up to levels not seen in over a decade. is it a good thing or bad thing? plus, yield curve inverted, we take a look. ♪ and it's hey now, here we go.

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dagen: new details emerging after jeffrey epstein's death in prison. today, fbi agents expected to sweep the federal jail where epstein died of an apparent suicide. this as the justice department announces it is temporarily reassigned the jail's warden and there are reports that the guards are suspected of falsifying logs after falling asleep on the job. this is in the new york times today. joining me now, fox news senior judicial analyst, judge andrew nanapolitano. judge, now want? >> is not a county lock-up with a bunch of drunks he sobering up until they can be let home.

this is the most serious federal temporary lock-up in the united states and it contains people who are not entitled to or can't make bail and are awaiting a court proceeding. epstein -- this is where el chapo was. right now, epstein -- as of four days ago, epstein was the highest profile person there. everybody that's there is temporary, so a lot of movement in and out. a prison is where you go to serve your sentence, you're there for whatever time has been allotted by the court and the law. you're here in this facility until your involvement with the court system is over. but it was known to everybody from the warden to the janitors that clean the cell, how high profile he was and how in danger his life was. an alleged pedophile -- if you're accused of something, in the prisoner's minds, you're guilty of it. an alleged pedophile is the

lowest of the low in a facility like that. with all of that as background -- dagen: and he already tried to kill himself once in july. >> we believe. but with all of that as background, they have a person watching him who is not a certified corrections officer, meaning not trained in restraining people and in resuscitation and they have two people that probably fell asleep and falsified their records. you can understand the attorney general' animous. the bureau of prisons is part of the department of justice. you'll see changes there and a major investigation. i think cbs reported they heard screams coming from the cell. was there somebody else in there with him or was he screaming at the last minute after he decided to kill himself and it was too late to go back. dagen: that story was not well-reported, i'll just leave it at that. i want to raise the issue of now

the survivors, any inindicted -- uninindicted co-conspirators, should all of these people who maybe committed crimes, maybe worked with epstein in whatever way, should they be quaking in their boots? >> yes, they should. dagen: the pressure is on the fbi and the justice department. >> they should. i understand some of epstein's former lawyers have obtained criminal defense counsel, noncriminal lawyers who had worked for him. here's the situation as the prosecution stands. ordinarily, when the defendant is dead, that's the end of the case, can't prosecute a dead person. can't prosecute his estate. but in this case, the indictment names three employees. doesn't name them by name, employee one, two and three. and it names other co-conspirators, known to the grand jury but not named here. who are they? were they the males whom it is

alleged ebb stein provided the services of female children for? all of that is going to -- plus the animus of the attorney general is going to result in an enhanced prosecution of anybody that had anything to do with him. add to that a new new york state law which took effect seven hours ago midnight last night, which says there is no longer a statute of limitations on sexual abuse. so anybody that alleged that anything that happened to them ithe epstein world, even the stuff that he pleaded guilty to and supposedly was exonerated for in florida, if any of those events occurred in new york, they could file a civil suit. look for household names along with the estate of jeffrey epstein to be defendants in those lawsuits. dagen: judge, great to see you. >> likewise, guys. dagen: judge andrew napolitano.

criminally you want to be the first person to talk and cut a deal. >> we know that. that's the way the government operates. you cut the first deal, you get the best deal, especially when there's a long train of people behind you that they're also after. dagen: recession warning signs, markets slideing with the two 10 year treasury yield inverting, so you have to pay more to borrow money if you're the federal government for two years compared to 10 years. doesn't make sense. every recession has been preceded by an inverted yield curve since world war ii. you see what it's doing to stocks. wasn't bullying, youtube taking down a viral video of cnn's chris cuomo and putting it back. so called him a word that he didn't like and he screamed obscenities at the other guy. what's the fallout? we debate it later this hour.

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dagen: welcome back. i'm dagen mcdowell, in for maria bartiromo. it's wednesday, august 14th. your stop stories at 7:30 a.m. eastern time. breaking news this morning, a recession signal flashing. the yield on the 10 year treasury falling below the yield on the two year treasury. that's an inversion that investors have been worried about. the 30 year yield falling to a record low but again, right now the yield curve between the two and the 10 is not inverted but historically has been a signal that a recession is on the horizon. futures are already -- were already lower because we got germany's economy contracting and then you had poor economic data including a high jobless rate out of china. they were already low this morning. there was already selling in the

stock market but now a 266 point loss on the dow futures, losses across the board. nasdaq 100 futures down more than 1% as well. this after yesterday's broad-based rally was sparked by president trump delaying some china tariffs, now delayed on things like smartphones, toys until december 15th. again, to benefit holiday shoppers. concern about the health of the global economy hitting markets around the world. we are looking at the european markets, the dax in germany, again, that economy contracting in the most recent quarter. those stocks down more than 1 and-a-half percent. i told you about the signs of a slowdown in china, the jobless rate hitting the highest on record. factory production, retail sales coming in lower than expected. there was green across the board following the rally in the u.s. yesterday. and breaking news right now that i'm going to get kevin kelly to respond to. wework filing for an ipo, it will list under the symbol we.

we'll talk about the 2020 race, a new poll shows former vice president falling behind in one key state. find out who is in the top slot. and the chris cuomo rant, youtube temporarily took it down. the fallout from the viral video ahead. breaking news on this wework ipo, in the filing the company reporting a loss of $700 million in the first half of the year. before this was filed, kevin said in the break wework files its ipo, that will be the top of the market. what trouble do you have with this ipo filing? this company is -- >> yeah, so soft bank put $10 billion so far into the company. last year we highlighted $700 million in the first half. last year they lost almost $2 billion. they're seeking to raise $3.6 billion. they put a place holder for a billion dollars in this s-1. they're actually really levered to the economy. if we get an economic slowdown,

it should hit them first. they have shorter term office leases with small and medium size businesses, over 60% of their revenues that they reported. they're valued higher than the actual real estate they're leasing. they're subleasing their space. if you look at a boston properties, they're looking at a valuation that is significantly higher than their own landlord. dagen: i have said that it doesn't take much to cause a panic in a market that is over-valued and a world that's highly leveraged and this is kind of -- this is an over-valued, highly leveraged company. this is kind of the perfect storm. >> it's important to note that soft bank is under water on their latest round into uber. so that's actually pretty telling as well. uber is actually under their ipo price and the price soft bank came in at the last round. now, they're still above -- they're still ahead in their initial investment but that's pretty telling. dagen: thank you, kevin. boom, mic drop.

we move on to markets. more on the futures lower this morning as the 10 year and two year treasury yields have inverted. the two year yield higher, was earlier in the morning, higher than the 10 year. that hasn't happened since 2007, right before the financial collapse, right before the great recession in 2008. 278 point loss on the dow futures right now. yesterday it was an up market across the board as president trump delayed tariffs on certain chinese goods. now delayed from september 1st until december 15th. that includes smartphones, laptops, toys and video games. again, just in time for the l holiday shopping season. joining me now, 32 advisors founder and ceo, former economic advisor to president obama, fox news contributor robert wolf. robert, it's just you and me, kid. what do you make of the market right now? >> well, i've been listening to the conversation. it's been quite interesting. let's just start where the

global economy is slowing, problems in china, problems in the u.k., problems in germany, u.s. is the best. but our economy i think is chugging along. i don't actually see the u.s. in a recession but we are being pulled down by everything else going around us. i think the president's policies right now are ill logical. i said that for two years. these trade policies are not policies. tariffs is a tax on us. it hits the consumer. we're 70% plus consumer economy. this on again, off again tariff, trade, it's hurting us. because companies have to get ready for the future. they have to do capital investment. they have to start looking at at business inventory. they have to start thinking about manufacturing, doesn't happen on a day, they build for the year, the second year, the third year. what we're seeing right now is business investment and capital investment is slowing and i think it's -- and it's clearly by what we're seeing around the

world that this policy's not working for anyone. and i understand the president saying he wants to hit china and that's all good. but we're hitting us as well. look at what's happening in farmland, that you and i have been speaking about, where we've had two bailouts and this can continue. so this is not great policy. dagen: robert, but there are talks scheduled on china. if we get -- i think it's in september, in a matter of weeks, here in washington, i believe. if we get a resolution on that, will that ease any concerns? will it revive business investment, giving them a more certain road ahead? >> i think that would be great. i think any time we have a situation where we can give certainty to companies and certainty to the investment market, those are good things. we've been hearing that i think you and i had an over/under that it was going to happen in march. both of us took the under. now we're talking september.

i mean, who could predict what is going to happen between china and the u.s., it's been so volatile for so many years. dagen: and goldman sachs, many people talking about nothing happening until after the election next year. but let's talk about the election and 2020 and the democratic candidate, bernie sanders has overtaken vice president joe biden in a new new hampshire poll, sanders seeing 21% support to biden's 15%, elizabeth warren with 12%, mayor pete buttigieg and kamala harris seeing less than 10% support each. the new york times reporting that john hickenlooper is considering ending his presidential run to seek a senate seat in colorado. so we're a few days past the iowa state fair. what did he these early voting states look like to you? who has the best ground game, say, in iowa and then new hampshire? >> yeah. well, we got some interesting polls yesterday. nationally it looks like about a third of the party supports what

i would say the pop ha pop poput which is sanders and warren, and a third is with biden and the rest is split, with can cay kama feeling the best of the other group. with respect to the early primaries, feels about a third, a third and a third, the vice president, former vice be president's looking good in iowa. it's not surprising that bernie and elizabeth will do well in new hampshire. i mean, from where bernie's from and where elizabeth is from, they corner new hampshire. it's not surprising, they'll do well. it's not their home state but it's pretty close. i think for the vice president, he has to show obviously a good showing in the upcoming debates, as do others. we have th the debates less thaa month away, the third debates. it will be either one night if we stay at 10 or under or two nights and it looks like we'll

probably get to two nights because it looks like steyer will be in and maybe a few others. i think right now we have to show that we have to whittle the field, actually. that would be the best thing for the party. dagen: do you think the candidates go after vice president biden on some of the gaffes that we heard over the weekend. simone sanders who works on his campaign came out with a passionate defense of the vice president. but there is some question as to whether people try to take advantage of that in the debates. do you think that happens? can he push through? again, it's an issue. if you're going to be authentic, people are going to misspeak sometimes. myself included, quite frankly. >> hey, listen, dagen, when i was in college and all along, they used to calm them wolfyisms, they used to put phrases together and i used to make them up and i think i've done okay. i don't think these gaffes is going to be the reason why people vote or don't vote for

joe biden. i think he's been having these gaffes for about 40 years. it hasn't really changed. that being said, i think he's going to have to exude a lot of confidence on the debate stage. they want to see the vice president have his mojo back. i think that's what a lot of us are looking for. but i don't think that this is going to be about who has less gaffes. i mean, the truth is, if you want to put lies on one spectrum and gaffes on another, i think i'll take gaffes all day. dagen: who are you talking about? >> well, i think i was just reading the washington post, it's over 12,000. so you can read it. i'll let you guys take it from there. dagen: okay. [ laughter ] dagen: robert wolf, i learned something about you. i didn't know that. i'll be listening for that, what, wolfyisms, is that what they're called? >> those little gaffes. it's okay. i'm trying to do a little better job with it. dagen: i'm working on three hours of sleep so it happens all day long. >> you've been doing a great job, your interviews with kevin

on wework and the judge on the epstein case, which is a whole different case, they were great. dagen: recession warning signs, mortgage debt piling to levels not seen in more than a decade. what you should know, next. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

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dagen: u.s. mortgage debt reaching a record in the second quarter. exceeding 2008 highs. jackie di angeles has the

details. >> this is as a result of the drop in interest rates. interest rates are under 4%, falling to that level in may. it definitely gives people incentive to go out and purchase new homes, if they can afford it to take advantage of the rates. certainly, the numbers we're seeing, that $9.4 trillion, it is higher than the 2008 peak and some people are saying, look, mortgage debt is a very big components of overall household debt and is this a red flag that we should be concerned about? it's interesting, because during the housing bubble you had a lot of delinquent debt. doesn't seem to be the case this time. seems people are being more responsible with their payments as this is happening. you're seeing refinances are going up. $17.5 billion in cash was drawn out of homes as well. and that is higher than we saw in 2006. but again, some of the evidence shows that people are doing better with those payments and they're being more responsibility. i want to -- being more responsible. i want to add one more point. this is interesting from the

federal housing administration, a change in rules to stimulate the condo market, for first time buyers. new rules are requiring only 3.5% down and lower credit scores than conventional loans if you get that fha loan for entry level condos and first time buyer, trying to stimulate things. talked about this on monday, where certain pockets of the country where prices are up and inventories are tight but a lot of places are building as well. seems that the administration is trying to stimulate those areas. but it's something certainly to watch, not necessarily a huge red flag just yet. dagen: john, what do you say? >> i think you're exactly right. it's not a red flag. the ratio of mortgage debt to personal income is much lower today than it was back in 2008 and how interesting that we had to wait 11 years to return to that record high which tells me there's basically no growth during that period from 2008 to

today. >> we had a housing bubble and it popped. it would make sense this would climb back slowly and it didn't do it in too quick of a time. >> also, the average price of homes relative to personal income is, again, significantly lower today than it was in 2006, 2008. nothing to become frightened about. but this relaxation of mortgage lending standards, if that stays around for a while and starts pushing home prices higher, then i'd become worried. dagen: final word, real quick. >> between relaxing standards and covenant-light loans, i mean, this does feel eeriely like 2007, 2008. >> i'm on the housing front you're getting carried away. you're not getting carried away as far as leveraged loans are concerned. dagen: it's never going to be the same crisis back to back. that's why the currency problems last week kind of freaked people out. jackie, thank you.

futures sliding, near the lows of the morning, 355 point on te dow futures. the two year yield higher than the 10 year yield earlier. typically a recession side. and was it bullying, youtube taking down a viral video of chris cuomo, next. -guys, i want you to meet someone. this is jamie. you're going to be seeing a lot more of him now. -i'm not calling him "dad." -oh, n-no. -look, [sighs] i get it. some new guy comes in helping your mom bundle and save with progressive,

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dagen: youtube temporarily deleted a video that showed cnn anchor chris cuomo confronting a heckler after being called the word fredo from the godfather. >> you're a more reasonable guy in person than you seem to be on television. >> if there's something you want to say about what i do on television, say it. >> listen -- >> you're going to have a big problem. >> what's the problem. >> it's different on tv. >> don't insult me like that. don't call me fred.

dagen: youtube released a statement saying this, with the massive volume of videos on our site, sometimes we make the wrong call. when it's brought to our attention that a video has been removed mistakenly, we act quickly to reinstate it. we also offer up loaders the ability to a appeal removals and we will re-review the content. joining us now, the cyber guy, kurt knutsson. why did the video get taken down? >> egg shells, they're walking on egg shells is why. we're talking about youtube, not understanding what position they should take on this one. at first, it looked like the video did contain what looked like at least a very abusive, hateful context to it. you would watch the whole video and probably say yes again. if you look at the context of the video, you find out the youtubeer behind this is a massive jerk that goes about trying to instigate these kinds of things from people and

putting it in context, does the video belong there. if i were youtube, i might err and say it has hit one of the check boxes that cause people to have videos removed from youtube list is hateful or abusive content or harmful, dangerous acts, list goes on to hate speech, harassment, cyber bullying. clearly, anyone can see this video and say either one of the parties in the video is at least checking one of these boxes but should it come down? when it becomes so public like this, there's another thing i think youtube's thinking about which is do we want to be seen as the censor of a video and stop it from going out and does that create a bigger problem? at this moment, there's not one thing they can do correctly with regard to this video. but we as americans can say this is garbage. it's all garbage. and put it into context. dagen: yeah, public figure and

no actual physical violence. there it is. kurt knutsson, thank you so much. still ahead, futures in a free-fall, recession warning signs. more ahead. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. 2,000 fence posts. 900 acres. 48 bales. all before lunch, which we caught last saturday. we earn our scars. we wear our work ethic. we work until the work's done. and when it is, a few hours of shuteye to rest up for tomorrow, the day we'll finally get something done. ( ♪ )

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investors running for the safety of treasuries and selling stocks, we now have a 370 point loss on the dow futures after the rally yesterday. the treasury market, the treasuries out of stocks, it's fueling kind of market volatility. right now we have earnings from macy's, we will see how this changes investor sentiment if at all, lauren simonetti has the numbers. lauren. lauren: right now not at all, dagen, macy's shares are tumbling in premarket, they just reported earnings, first of major department stores to report, when the stock is down 12% on the news, you know the news is not good, big miss, coming at 28 cents, expecting 45 cents and that expectation was a decline of 35%. so this is much, much worse than expected. as for revenue, a slight beat

here, $5.555 billion in the second quarter but this report not what wall street expected from macy's, when you look at the stock performance on the year, it is down 35%, it is the fifth worst performer out of the entire s&p 500, the good news for macy's came yesterday about tariffs on clothing and shoes, for instance, would be delayed until december 15th, however, 345eu -- macy's does sell a lot of furniture and furniture has been exposed to tariffs already. and as you know macy's coming to this report was already struggling. dagen: thank you very much, lauren simonetti, kevin, look at the stock reaction. >> yeah. dagen: premarket, the stock is down 11%, your reaction to macy's, again, we get wal-mart tomorrow overall retail sales, is this just a one of off if you will, a company problem? >> no, i think it's a company problem, it's emblematic of

retail space, they have to focus on experimental, this is just emblematic of the tough times in retail, it's always been a doggy dog world in retail environment and you have to focus, not only physical store but also online, you have to have that complement, 95% of overall retail sales are done between omni channel players and macy's has to win in -- in the online game and that is the most competitive losing game, hurts their margins the most, that's why you can see a company like macy's miss because if you're going to try to win in the online game, that's a loss for a lot of companies. dagen: i want to talk about inversion to have yield curve, did i explain it correctly to the viewers properly why this is

a recession signal. we keep saying historically a signal for recession but what -- why is it moving the way that it is, why is more -- why is the yield lower on the 10-year at this point. >> every recession in recent memory was proceeded by an inverted yield curve and so that's reason enough to worry about the possible end to this record-long economic recovery, that being said, not every inverted yield curve has been followed by a recession, so i think we still have an opportunity to try to do something with monetary policy to eliminate the inverted yield curve, and as you stated what you're noticing here is that investors are losing confidence in the future, they are getting into treasuries, they are getting out of equities, they are getting to very safe treasury securities on the basis they think that they're going to be protected from lower equity priced at the same time perhaps

realizing capital gain and increase in the price of treasury bonds as the 10-year treasury yield falls even further. dagen: i want to ask you this, kevin, lindsey bell sent this, lindsey bell sent e-mail this morning and we were discussing, the fed needs to get ahead of this, the market and treasury markets, you need to cut rates dramatically in september because, again, when you look at the 30 -- basically the 30-year yield is right in line with where the fed fund's rate is, it's overnight lending rate, that's a 30-year loan, that's how upside the world is, makes it difficult for banks to make money lending and lindsey points out, in 1995 we faced a similar situation with manufacturing slowing, unemployment at lows at the time and the yield curve was flatting, the fed started rate cutting psych that will outpaced markets expectations and market

able to rebound with the economy avoiding recession, the wild card remains trade. >> so the market is anticipating two more cuts, total of 75 basis points cut during year of 2019. we've gotten 25 basis point cut, in september they'll do 25 or 50 and they wouldn't do anything in october or they'll do 25 in 25, first of all, the fed needs to focus on the messaging, we saw after last cut market went down because chairman powell said don't expect us to have cut after cut after cut, that may be a one-off situation or maybe choppy when we get to cut. market sold off because of that. dagen: real quick. >> kevin is exactly right, i just looked at fed funds future and that's sign, only 15% probability to a 50 basis point rate cut at the next meeting on september 18th, i'd like to see

that. >> 25 basis points is the anticipated -- >> they haven't changed their mind. dagen: i will make a prediction by the end of the day if this holds up, those odds will be -- the expectation will be much higher for 50 basis points. >> real quick, i want to make the point that serve worried about recession because the last one was so deep and hurt so much, the great recession, the next recession shouldn't be as bad because we've got fiscal banking side on the private side in better health right, so banks won't be wiped out, we don't have to worry -- >> that's a great point, banks are much more capitalized today than 2007, they are better able to withstand loan losses. >> i don't want people to panic.

they made a case for ratifying the u.s.-mexican ood trade deal, listen to this. >> i see them empty and i see jobs going to other countries and i just never understood why the politicians didn't do anything about it but now we are doing it and by the way, the usmca, that's méxico and dan -- canada, that's a fantastic deal and good deal for unions, we have the farmers, the unions, the manufacturers, it's good to get everybody, we have to get democrats to put it up for the vote and most democrats will vote for it too, that replaces one to have worst trade deals ever made which is nafta. dagen: well, speaking of democratic congressman, sean, unions, manufacturing and farmers, that sums illinois, congressman, are you going to vote in favor -- do you think it

comes up for a vote usmca and vote yea on it? >> the usmca is needs improvement, in my ideal world the best case scenario improve and the best case keep nafta and worst case to get them all away. what i told ambassador lighthizer is there's 3 problems, pharmaceutical price and extended generic protection, labor issues that makes it far too easy to send jobs to méxico that we didn't fix from nafta and real enforcement problems that are basically drafting errors that allow any party to a dispute to essentially block the arbitration process. any normal process, those would be fixed by trade ambassadors and mr. lighthizer is working in good faith on that, what i have said with him given that the president's discomfort with the truth, a word from the president that he will change this after we approve i have to assume is a

lie and so i said to mr. lighthizer, to have my vote, those things will be fixed before we vote on it not -- not that we vote with a promise that they will fix afterwards, that's very tricky, but unfortunately, you know, our job as congress is to approve trade deals with the information we have and i have to look under the assumption that needs to be getting at the point signed, not on the promise that it would be fixed later. >> what's your assessment of how the rest of your conference feels on this issue? do they have similar concerns or do you think that yield position is perhaps more open to hacking usmca than many others in the democratic conference? >> well, we had very diverse caucus but i think my views are consistent with the majority of the caucus, there's real concerns, i mean, a lot of us ran on prescription drug pricing and provision that we will extend generic patent protection for additional 2 to 3 years, that's a problem for a lot of

us, we have a lot of us who care deeply about labor protections who watched us ship jobs to méxico because factory in el paso paying $7 and ciudad juárez paying 80 cents. and i think, again, the challenge a lot of us have is what the president up to 11,000 lies, you can't take him at his word, that's a real problem for me as a legislator because i -- i need to know that what i'm signing is binding and i can't take that assumption and i will tell you that the overwhelming majority of my caucus doesn't not trust the president's word and that makes more challenging than it should be. dagen: i won't get you to comment on the stock market, we are watching the futures and the picture worsening this morning, dow futures down more than 400 points at the moment, again, you have a signal in the treasury market where the yield on the 2-year higher than the yield on

the 10-year and inversion to have yield curve particularly in this part of the yield curve has historically been a sign of a recession on the horizon, what's your biggest economic concern of your constituents? >> frankly the biggest economic concern is the republicans tax bill, this is a district that got really hosed by the salt cap deduction and that is the number one issue right here all of the time, that's why i've introduced legislation with congresswoman underwood to partially restore some of that pain, that is the big driver right now. it's having a hugely depressive value on home values in the area and that's -- that's hitting people. dagen: congressman, great to see you, thank you so much, you never know what might happen, so we will be watching closely. congressman, breaking news rapper asap rocky found guilty in june 30th assault in sweden,

musician rakeem meyers released from swedish custody and brought back to the united states a month after his arrest but that he has been -- swedish court has found him guilty of assault for his role in the street, that brawl in late june in stockholm, coming up hong kong's crisis, police storming the international airport yesterday clashing with protestors that force today shut down the very latest as flights resume today, plus touchdown for jay z, rapper teaming up with the nfl to help social justice efforts. jay z's criticism of blacklisting colin kaepernick, what critics are saying ahead.

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dagen: fbi investigating ice shooting in san antonio, texas. cheryl casone with details? >> dangerously close to being murder case, had bullets gone 2-inches someone would have died, the gunman knew exactly where to aim. offering happening next month, 47 billion right now, but has lost billions over the past 3 years, we will see how the market reacts to this one, we rebranded to we company, sticker symbol we. barbie to galaxy far, far away, mattel issuing barbie dolls

inspired by the original '77 film. figures available preorder based on princess laya and dark vetter, you can buy at amazon.com, expect today ship in november, i'm trying to think of what ken would look like as solo. i would give -- ken has a chance of being solo. dagen: or chibacca. thank you so much, cheryl. trade delay, president trump hitting pause on china tariffs for certain products delayed after holidays, we break down the winners and losers of the trade feud and the kaepernick controversy, rapper jay z teamed up with the nfl to help the league social justice efforts following the anthem protest.

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>> well, i think we will keep seeing negotiations on its part and creating volatility and for the investors what's important is to see what companies are going to be impacted by this more or less, who will be the winners and who will be the losers, this is going to continue, this isn't over yet and probably going to go right to the elections. >> yeah, wolfgang, we saw technology do very well, there was -- because of the reprieve, you know, technology tends to get hit hardest because of supply chain and especially the costs coming from overseas, so one of the things that i'm worried about is the technology investors not only the currency war but also mutually assured disruption, we saw intel actually had to sell 5g modem business to apple because it was losing money for so listening and they couldn't compete against qualcomm, how should you position portfolios especially technology because i see the infrastructure side as great way to get reprieve but still get growth of technology?

>> you're absolutely right, what you need to do as investor, you need to look at companies that are revisiting entire supply chain and say can we really continue to take the risk about everything being sourced out of china or i'm going to start looking at producing vietnam or in méxico, malaysia, et cetera, what's the best thing to do to diversify supply chain and continue to on and the winners the ones who actually understand that this is not something that's going to go away overnight and adjusting accordingly, so those are going to be the winners and those are the ones that you want to look at and i agree with you 100% on that. >> wolfgang, i'm concerned about if china decides to allow currency to fall further, this implies further depreciation and that will make matters worse, am i correct of that assumption?

>> i think you are, i think that we will be very careful assuming that people are just going to have this as i've turned it for years now race to the bottom on the currencies, at some point this is going to be creating, obviously we have currency manipulators and there's lots of countries on the list since 2015, but at tend of the day you have to go back to what companies understand how to manage this properly as investor so if i'm worried about general motor who is has 20% of their sales in china, more actually, 40% of sales in china, what is general motors doing about it and how do they communicate that to investors but until general motors is stronger about relating that, it's an issue, but i think from a repatriation of the dollars it's an issue. >> that's what i've been saying wolfgang, be careful of the u.s., quote, winning, unquote the trade war because of the damage it will do to companies

not just into the u.s. economy, not just the global slowdown but it might throw fuel log but also the companies doing business there whether it's a tesla that's building a giga factory there, heavily highly indebted company and what does it do to its ability to pay the debt back, general motors, for example, we simply don't know yet how this plays out. i just do want to point out that general motors pointed out it has 18 billion in cash with potential to pay 2 years worth of dividends from chief, great to see you. >> great to see you, thank you. dagen: hostility in hong kong, clashes erupt at hong kong international airport crippling the airport for 2 straight days, the latest as flights begin taking off again. july im-export prices due out moments from now, any sign of inflation? we are watching the markets,

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dagen: dagen mcdowell in for maria bartiromo, wednesday august 14th, breaking news on the economy, we are waiting for import-export numbers, prices for july, we have them as soon as they -- as soon as we can break them down for you. we are talking about what we've been watching all morning is a recession signal flashing, the yield on the 10-year treasury earlier in the session had fallen below that on the two-year treasury, historically this inversion yield curve, remember, we've been talking about this all year long, the 3 has been higher than 10-year, this is a critical part of the yield curve where earlier this the 2-year was higher than 10-year and this is a sign of recession historically indicater but right now inflation, july import-export prices are out,

lauren simonetti has the numbers. lauren: it's showing up, imported inflation for the month of july, increased and we were expecting no change, import prices, goods coming to our shores rose 2 tenths of 1% in july from june as for export prices they did rise by the same number, also two tenths of 1%, dagen. dagen: export prices were also up as well. lauren: exports up as well and same expectation there unchanged. dagen: thank you very much, lauren simonetti. core consumer prices for two months in a row, strongest two-month gain in more than decade, little inflation, maybe, what do you make of -- >> i don't find this to be alarming, i think what we will find out is that consumers will resist higher prices and that's going to be costly to real

consumer spending, retailers, macy's, macy's revenues beat expectations but the earnings per share were well under expectations that can mean only one thing, costs are rising rapidly and eventually the inventories build up and the prices will settle down. if this is really a problem, problem with inflation, we would see that 10-year treasury yield moving higher, instead it's been moving lower. >> very good point, macy's lowered guidance, 2019 guidance earnings per share, if you take a look at the stock premarket trading at macy's, we are watching the futures, the futures are off their lows in the morning, futures down more than 400 points earlier, macy's shares plunging more than 4% in premarket trading earlier. it's down more than 13% right now and we are talking about these futures and inversion of the yield curve between the two-year yield and the 10-year

yield, dierdre bolton in the floor of new york stock exchange. the inversion between the 10 and the 2, that hasn't happened since july 2007 and that's marker that obviously upsets many people and, of course, when people talk about this inverted yield curve as you've been doing with your guest on sentiment level it makes people worry because they say, okay, when this happens, recession often follows, i want to call your attention as well to financials, i heard you talk about retails and from what we are seeing here as well, they are down but the financials also moving lower on this inverted yield curve, the idea being all of the businesses, the banks, all of the names that we know harder for them to make money when they are borrowing long term, lending short-term, that does not bode well for the financials in today's session, i want to mention the 30-year too, dagen, a lot of strategists that were e-mailing us, calling us, when

you see the 30-year be this up, investors are buying long-term debt, that's another sign of fear in the market, all of the entire yield story no matter what you pick are leaving investors with very little alternative in stocks, if they don't like stocks where are they going to go, great piece by colleagues, but in the meantime, dagen, we are seeing inverted yield curve to affect futures, i'm looking at them down 400 points right now, so open in the red at least that's any opinion. back to you. dagen: thank you so much, dierdre, i just got on e-mail from andy, guest on the fox news network over the years, bonds are screaming that the global economy is going under recession, german gdp confirming that with a negative trent and with the inversion, the 10-year hit new low today of 1.57%, joining me --

>> watch the last 2 hours, that's all we've been talking about. dagen: yes, exactly. the banks -- we will get to herman cain, i want to say this really quickly, but the banks were screaming this last week, you had a major selloff in financial stocks, and $15 trillion in debt globally, it really turns the entire financial system and banking system on its head and when you have inversion of the yield curve, it's very difficult to make longer-term loans at rates that are lower than what you're paying to borrow money short-term. >> it's called the net interest -- >> right. the essence of banking. >> exactly. >> they are getting hit hard and you've seen the most pessimistic ceo's on the streets are the bank ceo's. dagen: good point, right now we have -- this is a normal -- as much as normal as these days, the normal yield curve, the 2 years below the 10-year, john, i will get to you in a second, i want to get to herman cain,

herman, you're a businessman, you were at least -- your flame was being thrown out there as being on the federal reserve board, what do you make of this market and the economy at this point? >> first of all, global economy is complex and i don't recommend anyone reacting to one single metric, but what i believe that all of these metrics and all of the movement and this inversion it suggests that the federal reserve should act sooner rather than later, they have a history of acting later than sooner, before things get really, really bad i believe that they should be more aggressive, that's what it says to me and if i were on the federal reserve board, this is what i would be screaming to the rest of the federal reserve board governors. >> herman, this is kristin anderson from the washington examiner, you know, in addition to the issues regarding interest rates and what the fed should do, you also have the issue of trade moving out there with even

with today, look, we are going to suspend some of the tariffs on china for a couple of months still trade dispute with china in place as well as questions about whether usmca will get passed. what is your outlook for whether this economy a year from now will, you know, we know that the president right now does pretty well in polls when asked about how the economy is doing, what's your outlook for political implications for all of this looking further down the road? >> i don't believe we will be in a recession a area from now, i really don't, secondly, what the president is doing is negotiating with china, china has been a difficult for years, they have gone back on some of their agreements, but chaos, we have seen in hong kong, it's not about airplanes, it's about a 1997 agreement with the chinese communist government that they made with the united kingdom and that chinese communist government went back and broke it.

that's what the demonstrations are all about and what the president is doing, he's demonstrating there's a new sheriff in town. we previously had had too many presidents and too many administrations that would just roll over whenever china wanted to do something, here is one other point, business people will adjust to these variations and prices whether they abroad or here at home. that's what they do, they adjust, i'm not that concerned that this will spiral out of control. dagen: politically herman, you ran for the republican presidential nomination, the president is in a tough spot and i want to bring kristin back in here because, again, the american view of china has -- has worsened, 60% of americans hold negative view on china at this point unfavorable opinions hitting 14-year high, they seem to be based on the pew research poll with the president, but if the economy weakens going into a

presidential year, that leaves him in a vice? >> i think it will leave him in a vice but here is the thing, i believe that the american people reflecting the statistics you gave about being more unfavorable to china, they are figuring china's modus operendi, what the president is doing leverage trade talks maybe to get 3, 6 or 12 months from now, that i believe the american people see what's going on and they are on his side, many of them know that he has to play hardball with china if we are ever going to get anything and in the past we've never got anything substantively. dagen: herman, i want to bring kristin, kristin in here about the president has -- he he is a

master at communication, like it or not, and the president has been since last year really setting up jay powell at fault, does that work? >> overall presidential job approval numbers are by the strong economy, if we get to a year from now and the economy is not doing as well, what impact does it have on his reelect and by being able to say, look, people always give presidents more credit and more blame for the state of the economy than probably warranted but by being able to say, look, it's the fault of china, it's the fault of congress, it's the fault of the fed that the economy is not doing what it should be, don't look at me, look at them, he's trying set up a situation where he can divert blame for some bad economic news if that's what we are looking, 12, 18 months from now. dagen: herman, yeah, continue. >> i wanted to add one other point to what she just said. dagen: yes, sir. >> politically, the president

has been beat up, challenged, lied on in every which way you can from a political standpoint but here is why i believe that the american people are hanging in with the president, he just continues to do his job and people see that. i believe that that's one of his greatest assets, he is not deterred or slowed down by all of this rhetoric and all of these attacks that are coming from the presidential democratic wanna-bes as well as elected democrats. dagen: i want to ask you this herman, the nfl and social justice, the nfl has -- is bringing on jay z to smooth over issues regarding social justice and expand the nfl's entertainment offerings like making the half-time show better, i would suggest never, ever have maroon 5 back, that's coming after the anthem protests from colin kaepernick, where does this go from here, you think? >> i think that you have two different cultures, you have the culture of the nfl organizations

and the players that may bring tensions that most of us don't even know about, then you have the general public, we don't see all of this stuff that maybe they are feeling and seeing other than seeing people that want to kneel during the national anthem, so jay z's impact, i can't predict whether it's going to be positive or negative and for the nfl organizations and nfl to say that we want to do a better job at half time shows and entertainment and all of that, sobeit, you know, it doesn't impact the general public, the general public still wants to keep politics out of sports, that's how we relax, they want to just keep it out. here is an impact i really can't predict what is really going to do long-term. >> herman, great to see you, thank you so much for being here. >> thank you, dagen. dagen: we are watching the markets, of course, recession fears escalating with the two-year yield this morning topping the yield on the 10-year and inverted yield curve, this

is recession signal, has been going back to world war ii, stuart varney will weigh in and hong kong crisis, police storming the international airport yesterday clashing with protestors, force today -- forced to shut down terminals, the latest as flights resume. fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.

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dagen: futures are pointing to a sharply lower open, 381 point loss on the dow futures at the moment as treasury yields flat, joining me now the host of varney & company on what to make of this stuart varney. >> i don't know whether the inversion right on clear line of inversion and noninversion, i don't know whether that's going to lead to recession, but i think i've got a good idea as to why interest rates are tumbling whether they are long rate or short rates, they are tumbling because america has strong economy, america offers a rate of return, most of the rest of the world does not, we received word this morning that germany's economy actually contracted, most of europe is at or close to recession, china is slowing down, we, on the other hand, have strong and growing economy at 2% rate per area.

we also on interest if you invest in american treasury bond or security and american treasury security. you get a rate of interest, you get no interest in europe or japan, in fact, they keep some of the money that you have given to them. that's why money is pouring into america that drives up treasury prices and drives down treasury yields. that's my opinion of what's going on. it's actually a sign of strength of america. now, why it's leading to this downside move in the stock market is because conventional economic say that is when you get this inversion short rates higher than long-term rates like in 2007, short sign of recession, that's maybe, but i'm taking it assign of strength that money is pouring into america. what do you say? dagen: i can't wait for the next 3 hours on varney & company first and foremost 9:00 a.m. and noon eastern, but there's definitely a worry among stock

investors that the u.s. economy will continue to weaken but potentially the treasury market is clear i will saying that the federal reserve is behind in the rate cuts that they need to do more, bring down shorter-term interest rates, i tried to point out that banks can't make money on your net interest margin when short-term rates are higher than long-term rates, to put it in perspective, stuart, if you look at the 30-year, what the 30-year treasury is yielding, that's right in line with the overnight lending rate is. >> yes. dagen: he's -- that's not a word where bank can make money and that's a concern of the u.s. economy. stuart: here is another area of analysis, surely the federal reserve is going to lower rates to the tune of half percentage point next time they meet, they are going to be stampeded into it, aren't they, i would have thought supposed to be good news for the market but perhaps this

time around it's not, dagen. dagen: stuart, thank you so much, vuk -- varney & company 9:00 a.m. to noon, thank you, mr. stuart varney, we are watching shares of macy's plunging after the company cut 4-year profit guidance, this comes ahead of wal-mart's results tomorrow, 15% loss on macy's shares premarket more ahead. can lift you right up.

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dagen: the trump administration's new green card rules facing challenges, legal ones, in california. cheryl casone has more. reporter: the rule denies permanent residence to immigrants who are on public assistance and denies entry for those likely to end up in the program. now back to hong kong. the airport is back open after protesters clashed with police again. that forced flights to be canceled over the past two days. china is calling the pro-democracy demonstrations terrorist acts. a few dozen demonstrators held up a banner apologizing. of course we will be watching all the news coming out of hong kong. as long as the airport can stay open, business stays running in hong kong. that would be a good thing for the chinese. dagen: thank you so much. good to see you. coming up, recession fears escalating.

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dagen: we are a little more than 30 minutes away from the opening bell. the dow, take a look at where the futures are, off the session lows, 368-point loss on the dow futures. the two-year yield higher than the ten-year yield. inversion of the yield curve we haven't seen since 2007. john lonski, tell us what to watch today. >> i think today, you want to keep an eye on the treasury bond market. we hope that yields stabilize. i think the real big news is going to come out tomorrow with the retail sales report. we've got to have some evidence that the u.s. consumer is continuing to spend. whether we like it or not, the world economy now depends on the continued growth of household spending in the united states. today we did have a little bit of good news that was overlooked. home buyer mortgage applications were up from the previous week,

up 12% from a year ago. moreover, applications for mortgage refinancing's up 37% from the previous week, up three times from where they were a year ago. dagen: kevin? >> 40% of the s&p 500 earnings come from overseas. that could mean that margins could come down, you could see earnings take a hit. i would stick with the great real estate names that have performed. it's the distribution centers that get you packages, revenue up 26% this past quarter. stick with the distribution centers as well as cell phone towers, data centers, because we all use the internet. >> this morning's yield curve inversion, if we start seeing more and more signs that are potentially foreboding for the economy, expect to see messages from the president like the fed, like congress, that are standing in the way of better growth. dagen: what can the president do to kind of settle things?

>> call a truce in the trade war. that would help. dagen: from your mouth to the world's ears. great to see you all. that doies it for us. "varney & company" starts right now. stuart? stuart: good morning, dagen. good morning, everyone. please look right off the top at this. huge selloff this morning, wiping out most if not all of yesterday's gains from the rally. we are down big-time. the dow industrials will be off well over 300 points. the s&p, about 1.33%. the nasdaq over 100 points, 1.5% down at the opening bell this morning. here's the backdrop. long-term rates are now below short-term rates. actually, they are right about even right there. we had an inversion earlier. that inversion is considered a signal of a coming recession. as our rates fall, so does the stock market. go figure that one. look, in my opinion, long-term